A former Folsom resident and executive of a Rancho Cordova firm has been sentenced to four years in prison for securities fraud.
Matthew Sarad, 42, currently of Bakersfield, was sentenced Wednesday in federal court in Sacramento, according to a U.S. attorney’s office news release. He was found to have made false claims to investors in two separate business ventures.
According to court documents, Sarad lived in Folsom and was the founder and chief executive officer of Rancho Cordova-based Telomolecular Corp., and more recently, a company called Sun Nanosystems of Folsom.
Telomolecular was purported to be a biotechnology startup company that had developed nanoparticle technology that could eradicate cancer and treat other age-related diseases.
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Between November 2005 and July 2008, Sarad solicited investors nationwide, offering them stock in Telomolecular. In selling the stock, authorities said, Sarad made false statements, such as telling investors that the company expected its cancer-curing products would complete clinical trials, obtain required government approval and make it to market in less than three years. He also claimed that Telomolecular had a deep management team with experience taking companies public.
Sarad collected about $6.7 million from approximately 400 investors. But the company never developed a marketable cancer-curing product, never conducted clinical trials and never had a management team with experience taking companies public, and never went public.
Between January and December 2009, Sarad also owned Sun Nanosystems. It purported to install solar energy systems for residential and commercial customers. The firm claimed to have developed nanoparticle technology that vastly increased the efficiency of solar panels.
In selling the solar panels, Sarad falsely claimed that Sun Nanosystems worked with state-of-the-art proprietary technology that could increase the efficiency of conventional solar panels by as much as 50 percent. He claimed the firm had a great deal of experience installing solar panels and had satisfied past customers. Authorities said Sarad collected approximately $300,000 from customers but failed to complete installation of any solar panels.
In sentencing, U.S. District Judge Kimberly J. Mueller found that Sarad had engaged in a “pattern of purveying false information” and that a “significant sentence was warranted.”
The case resulted from an investigation by the Federal Bureau of Investigation.